The document discusses the importance of effective boardroom practices in growth companies, emphasizing the need for a focus on strategic decision-making and continuous evolution. Key points include the significance of board composition, proactive engagement with management, and balancing short and long-term goals for maximizing shareholder value. Recommendations for best practices in board operations reflect a commitment to diversity, preparation, and aligning with the company's growth trajectory.

1. Building value in growth companies
thru Boardrooms
Jussi Lystimäki
Partner, Boardman Ltd
CEO, Schibsted Classified Media, Finland
Slush13 - 13.11.2013

2. My background is in growth
companies and internet
One of the top media groups, Mcap 5+bn
euro, in top-3 in global online classifieds.
Listed in Oslo. Organic growth + M&A
transformation, green field starts
The leading communications group in the Nordics, 800 people, Fully
owned by Finnish state. Klikki is the leading nxt generation
digimarketing company, In 2010 and 2011 EMEA Deloitte FAST 500
One of the global top10 in digital UX and service design.
Deloitte FAST 500 EMEA 2008, 50% California, 50% Finland, 90 people
IT developers for online banking, Telco and transactions, 70+
people, Exit to Ixonos Plc 2007 (OMX), Deloitte FAST 500
EMEA 2006
One of the global #10 in BI market intelligence. More than 150
people, over 100 countries, VC-backed (Capman, 3i)
Early stage and incubation – Internet/mobile tech driven FIN,
ISR, GER, UK, CHINA, US, listed on London AIM-list, market
cap 200mil euro. Exit 2002.

3. The future of any company is
driven by decisions taken
What is the focus and use of
time in the boardroom?
Topics discussed and
decisions made in the
boardroom?
In which role the board
gives the best value for the
company growth?

4. For Investors and Angels the value created
between pre-money and exit matters most
 No matter how well you get yourself into the
game, identify and negotiate the exit pricing, the
most value is created during the ”investment
period”
 How is the Period capitalized for building more
value into the company
 What is the focus and use of time in the
boardroom – benefits for owners to have an
active board

5. ”Start-ups don’t starve – they drown”
Shawn Carolan, Menlo Ventures
 Excitement of the opportunity can easily lead to a loss of
focus and to a mistake in trying to do too many things at
the same time
 The window of opportunity is open or closed – the idea is to
keep the eye on the direction and focus despite the daily
routines and championing
 Strategy is often an evolutionary journey from desired
”vision” to the real-life implementation – key assumptions
behind the strategy might/will change and live as the
market evolves. Sometimes you need to fail fast and make
those decisions to use resources for a better growth path.

6. One size does not fit in the boardroom
especially in high growth companies
 Growth company grows in ”stages” and faces new
challenges during the journey – the experience and
skillset combination in the boardroom should evolve
accordingly
 The better the board can understand, tackle issues
and support the company+mgmt – the higher is the
value created
A
 Very seldom, same persons have a) complete
B
C
understanding, b) spirit and c) dare to run dialogues
about …the markets, branding, customers, sales, company
culture, strategy work, mgmt structures, finances, ecosystems,
R&D, humans, superheroes, liabilities, biz model, …

7. ”You do have your moments. Not many, but
you have them.”
Princess Leia, The Empire Strikes Back
 From pre-money to great exit
– An active and well organised work in the board
– Its not a reporting address but an asset to create value
 Don’t starve but drown
– The strategy and implementation focus are important
– KPIs, checking of key assumptions, competencies and
foreseeing issues in growth
– Chairman-GM combo is key – how to build a great team inside
the board and sync well with the top management
 One size does not fit to all
– Working orders, competence mix, must-win-agendas should
change by the course of time
– What is in the horizon should sit in the board as well

8. To become successful – also the work by
the board needs to evolve
My
idea
Early stage
Structured growth company
The boardroom work develops and evolves
during the course of the company as well

9. What Finnish growth companies see as top 10 list for
minimum level of board work
1. Meeting practices, working order and meeting agendas are in good rhythm
2. Documentation and materials at DD-level at all times, undersigned
3. Composition of the board is planned and include external(s)
4. Equal treatment – its for the company, not for a single shareholder
5. Strategy, implementation and targets – know when issues relate to the
strategy when to the implementation
6. Financial management and cash flow
7. Picking up the right Managing director to run the company and evaluate his/
her performance and skills, also successor planning
8. HR mgmt & Motivation, basic processes around people and recruitment
9. Shareholders’ agreement and checking of it, clear rules
10. Rewarding and compensation structure and models
Top 10 best practices include
Diversity in boardroom, networking+connections, quality of meetings
+preparation, inspiring and energizing atmosphere, clear will and
goal from shareholders, ST+LT targets, financing+innovation
+strategy in balance, focus+lean+fail-fast, customer+sales
orientation, meaningful mission
Source: Boardman2020 study: Kaaoksesta Kasvuun 2013

10. In many cases the typical board meeting agenda should
be turned upside down – use of time tends to look back
Ideal use
of time
20%
• Cash flow, budget, similar-level crisis
• B.Plan and changing assumptions
• Review results and figures since last meeting
• Meeting format, meeting times
80%
• Customer satisfaction, -churn, cross sales, …
• Risks, foreseeing risks
• Direction, where we are or should be heading
• Key persons’ motivation, can-do, team & culture
• Competition, how to take advantage on that
• Strategy and implementation of it, follow-ups
• Future in 2-3 years or more
typical use
of time
95%

11. In the High performance model – the board is
a proactive muscle for the company
Role

Maximise the value of the company for shareholders




Attrack and recruit top management into mgmt team and boardroom
Mentor, steer and measure mgmt team and their work – Chairman leads
Remove barriers for growth and development proactively
Bring in insights and perspectives to develop the company, and
experiences which cannot be recruited into the mgmt team – evolving by
the growth stages
Guide, oversee and promote systematic, regular, ethical and juridical way
to govern the company


12. Typical discussion topics - FAQ
When is the right time to have an external member in the board
•
There is no written rule on this. The moment when the external member is
chosen, the boardroom work will be lifted up, as the work needs to become
more systematic, prepared, documented and planned.
What is a typical compensation level for members of the board, and for
the chairman?
•
There are studies made by Boardman and Hay Group around this topic around
growth companies. A typical rule of thumb is to have a compensation level
similar to 1-month salary of the GM for a member and bit more for the
Chairman depending of his/her activity levels. The median is around 10k per
year.
Why a fixed compensation is better than a compensation per meeting?
•
The payment per meeting focuses on meetings, but the work between the
meeting is very important as well. The fixed one helps to give focus on
meetings but also on efforts/work done between the meetings.

13. More info: jussi.lystimaki@boardman.fi